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Abstract Background To explore the efficacy and safety of Transcatheter rectal arterial chemoembolization with oxaliplatin and S-1 concurrent chemoradiotherapy as neoadjuvant therapy for locally advanced rectal cancer. Methods This s a prospective, monocentric, non-randomized clinical study, a total of 95 patients were enrolled and assigned to two groups: an investigational group (n = 50) receiving transcatheter rectal arterial chemoembolization (TRACE) with oxaliplatin and preoperative radiotherapy plus S-1 concurrent chemotherapy (NATRACE-CRT), followed by surgery, a control group (n = 45) receiving standard fluorouracil-based combined modality treatment, consisting of preoperative radiotherapy plus capecitabine based chemotherapy (NA-CRT), followed by surgery. The primary endpoint was postoperative pathological regression rate which evaluated by tumor regression grade (TRG) according to the 7th edition of the American Joint Committee on Cancer (AJCC) standard, and the secondary endpoints included objective response rate (ORR) and toxicity, as well as surgical complications, and postoperative tumor downstaging. Results Compared with NA-CRT group (17.78% (95% confidence interval (CI): 6.2–29.4)), the TRG0 was 30% (95% CI 16.8–43.2) in the NATRACE-CRT group (P = 0.231). The TRG0 + 1 rate was 60% (95% CI: 45.9–74.1) and 33.33% (95% CI: 19–47.7) in NATRACE-CRT group and NA-CRT group, respectively (P = 0.013). The ORR of the NATRACE-CRT group was 84% and that of the NA-CRT group was 66.67% (p = 0.058). Incidence of preoperative toxic side effects and surgical complications was similar between the two groups. Conclusion TRACE with oxaliplatin plus concurrent S-1 chemoradiotherapy as a neoadjuvant therapy provided better pathological remission rate versus standard treatment with a similar safety profile. Trial registration NCT03601156 .